VALUATION REPORTVALUATION REPORT · My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with IVS (International Valuation Standards)

SAMPLE

0120AE2008-VWHO

VALUATION REPORTVALUATION REPORT

10 February 2008

Prepared forWaka Baryu

(Signature)

20-1-303 Kitamachi, Shinjuku, Tokyo, 162-0834 JapanValue Workers, Inc.Takashi Yamaguchi (Valuer)

Prepared by

Pursuant to your request, I have prepared a summary report of a completevaluation for the subject property. The attached report details the scope of work,level of reporting definition of value valuation methodology and pertinent datalevel of reporting, definition of value, valuation methodology, and pertinent dataresearched and analysed in the development of this valuation.

(Note)The forecasts, projections, or operating estimates contained herein are based on

current market conditions. These forecasts are, therefore, subject to changes withfuture conditions.

SAMPLE

Certification

I tif t th b t f k l d d b li f th tI certify to the best of my knowledge and belief that:

1. The statements of fact contained in this report are true and correct.2. The reported analyses, opinions, and conclusions are limited only by the reported

assumptions and limiting conditions, and are my personal impartial, and unbiasedprofessional analyses, opinions, and conclusions.

3. I have no present or prospective interest in the property that is the subject of thisreport, and no personal interest with respect to the parties involved.

4. I have no bias with respect to the property that is the subject of this report or to theparties involved with this assignment.

5. My engagement in and compensation for this assignment were not contingent upondeveloping or reporting predetermined results, the amount of the value estimate, or

6.

8.

p g p g p , ,a conclusion favouring the client.My analyses, opinions, and conclusions were developed, and this report has beenprepared in conformity with IVS (International Valuation Standards).

7. I have the knowledge and experience to complete the assignment competently.No one provided significant professional assistance to the person(s) signing thisreportreport.

Signature:

Date of certification: 10 February 2008

SAMPLE

Table of Contents

Effective Date of ValuationFinal Opinion of Value, Definition of Value.

Final Opinion, Definition of Value, Effective Date, etc. .... P. 01

.... P. 011.2.

.... P. 01Ⅰ．

3 01bl i

Property Right ValuedⅣ．

.... P. 05

.... P. 05

4. History of Subject Property

Identification of the PropertyScope of WorkⅡ．

Ⅲ．

3. .... P. 01Reasonable Exposure Time

.... P. 03

.... P. 01

.... P. 02

Ⅴ． Owner on the Registry Book.... P. 05.... P. 05.... P. 06

.... P. 06

.... P. 06

Ⅷ． Purpose and Intended Use of the ValuationⅦ．

Date of Inspection and ReportGeneral Assumptions and Limiting Conditions

General FactorsⅩ． Valuation Process

1.

Ⅸ． Intended User(s) .... P. 06

Ⅵ．

g y

.... P. 11

.... P. 12

.... P. 14P 15

.... P. 06

.... P. 11

.... P. 09

4.

General Factors

General Condition of Subject Property, and Zoning

7 Application of Valuation Methods6.

Location and TransportationGeneral Condition of Subject Neighbourhood

Highest and Best Use5.

1.

3.2. General Condition of Community

.... P. 15Cost ApproachA.

7. Application of Valuation Methods.... P. 15

.... P. 15a. Land Value(1)

( )(2) Income Approach (Land Residual Method)

Market Approach (Land)

i.

.... P. 15

.... P. 15ili i

Value of the Condominium .... P. 15

.... P. 17d.

(3)b. Reproduction Cost of the Building

Depreciation

.... P. 15

Reproduction Cost of the Condominiumc..... P. 16.... P. 17

Reconciliation

e. Ratio of Utility .... P. 18.... P. 18ii. Value of the Subject Unit

Land Sale Comparables Analysis .... P. 21Reconciliation and Final Opinion of Value

Sheet-ⅠIncome Capitalization (Land Residual Procedure)

.... P. 19

.... P. 20

.... P. 23

Income Approach (Direct Capitalization Method) .... P. 19

Sheet-Ⅱ

Income Approach (DCF Method)C.D.E.

jB. Market Approach .... P. 18

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Sheet-Ⅲ Ratio of Utility .... P. 24Sheet Ⅳ Condo Sale Comparables Analysis P 25

.... P. 27Sheet-Ⅶ Rent Comparables .... P. 28

Income Capitalization (DCF Method)Sheet-Ⅴ Income Capitalization (Direct Capitalization Method) .... P. 26

A di Ci ( d C bl ) A 01

Sheet-Ⅵ

Sheet-Ⅳ Condo Sale Comparables Analysis .... P. 25

Registered Land Surveyed Map .. App. 06

Residential Map .. App. 04

Aerial Photographs .. App. 02Topography Map

Public Sectional Map .. App. 05

.. App. 03

Appendices City Map (Land Comparables) .. App. 01

Building Drawings (Subject floor) .. App. 08Copy of Road Register Book .. App. 09

g y p pp

Photographs .. App. 12Copy of Public Registry Book .. App. 11Document of Building Confirmation .. App. 10

Registered Building Drawings .. App. 07

Photographs .. App. 12

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1

< Fi l O i i f V l >

Final Opinion, Definition of Value, Effective Date, etc.

Final Opinion of Value, Definition of Value.1.

Ⅰ．

AUD 960,117.-

JPY 92,200,000.-< Final Opinion of Value >

(In terms of cash)(Excluding consumption tax)

(AUD1 = JPY96.03)

(Date of the rate: 08 Feb 2008)

For the purpose of this report, market value is defined as follows:< Type and Definition of Value >

Marker Value is the estimated amount for which a property shouldexchange on the date of valuation between a willing buyer and a willing

2.

Reasonable Exposure Time

Effective Date of Valuation

：

：

Around 6 months

08 February 2008

exchange on the date of valuation between a willing buyer and a willingseller in an arm ’ s length transaction after proper marketing wherein theparties had each acted knowledgeably, prudently, and without compulsion.

3

According to the public registry book:Subject condominium was built on 14 March 2003, and Sadamasa

K i b ht it 29 M 2003 At th t ti l i f th bj t

：

Reasonable Exposure Time

History of Subject Property

： Around 6 months3.

4.

Kagami bought it on 29 May 2003. At that time, sale price of the subjectproperty was JPY82,500,000. (including consumption tax)

Afterwards, Subject property has not been transferred to any otherentities.

This valuation is performed based on the following conditions.

Ⅱ． Scope of Work

1. I checked the location and area (sq.m.) of the subject property with the:Public Registry Book

1

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Property Tax Notice

2

I conducted inspection on the subject property (exterior).

Registered Land Surveyed Map

contract at the Newly Built Sales.Registered Building Drawings; and

3 I h d d l d th l t t k t i th bl2.

Property Tax NoticePublic Sectional Map

3. I researched and analysed the real estate market in the comparable areas.I collected and examined a lot of recent sale/lease comparables in this area.4.(Additional contents are included in each section of this report)

2

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Identification of the PropertyⅢ．

3

1. Land

Address ： 1-2-3 ABCD, EF-ward, Tokyo

Identification of the PropertyⅢ．

<Legal description>

(Registered Area)

(sq.m.: square meter)

Lot Number Area (sq.m.)

1-2-3 ABCD EF-ward Tokyo

Category ofLand

Building site 3,092.16(東京都EF区ABCD一丁目2番3)

3,092.16

1-2-3 ABCD, EF-ward, Tokyo

Total

Location, House Number

(sq.m.: square meter)

Building

Area (sq.m.)

<Legal description>

Structure, Category

2.

Building Name: Great Maison

(Registered Area)Reinforced concrete 1F

664 21

1,125.20

4F

2F 1,081.36942.703F

5F

(EF区ABCD一丁目2番地3)

Flat roof1-2-3 ABCD, EF-ward, Tokyo

8 story801.15

g664.21

8F 450.817F 518.43

6,180.74Total

596.885F

(建物の名称: グレートメゾン) 6F

3

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3 Subject property

4

77.91㎡74 16㎡

3.In this valuation, subject property to estimate is following unit.Unit Number:

Subject property

Category:608

(wall-centre-measurement)( ll i id t)

Area written in the contract:A itt i th i t b k

residence

ＥＦ一丁目2番3の608Unit Name:

74.16㎡

Tax baseArea RateAssessed value

(sq.m., JPY)Tax/year

In this valuation, area depends on wall-centre-measurement. 77.91㎡

Description on the property tax notice

(wall-inside-measurement)Area written in the registry book:

4.

230,400

1.4%Land

0.3% 31,100

37,100

17,000

64,600,000

Fixed property tax41,000,000

City planning tax

City planning tax23,600,000

10,372,375

40.32

10,372,37574.16Bldg.

0.3%

1.4% 145,200

2,653,312

5,668,587

Fixed property tax

4

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In Japanese law (Act on Building Unit Ownership, etc.): Building unitownership, Share in a common element, and Right to use the grounds.

Property Right Valued

[Occupant: Owner]Fee simple

Ⅳ．

5

Sadamasa Kagami Address: 2-19-20 Kanteigaoka, XYZ-ku, Tokyo25 January 2008

Ⅴ．

As of

Owner on the Registry Book

Ⅵ．

10 February 200801 February 2008

(Date of Report)(Date of Inspection)

Date of Inspection and Report

Ⅶ． General Assumptions and Limiting Conditions

This valuation has been developed under the following general assumptions andlimiting conditions:

Valuation of owner-occupied condominium unit.Subject land and building are occupied and used by the owner. This valuation

is developed under the condition that the properties are free of any rights otherthan ownership.

1.

Area (size) of land and building depends on the public registry book. That ofindividual area depends on the wall-centre-measurement in the contract.

2.

The property is evaluated free and clear of any or all liens or encumbrances(unless otherwise stated).

5

4.

Ph i l t t f h ki h d t i l hi h t b

3.

The forecasts, projections, or operating estimates contained herein are based oncurrent market conditions. These forecasts are, therefore, subject to changeswith future conditions.

individual area depends on the wall centre measurement in the contract.

5. Physical test for checking hazardous materials, which may or may not bepresent on the properties, has not been performed. The value estimated in thisreport is predicated on the assumption that no hazardous materials are on or inthe properties that would cause a loss in value. No responsibility is assumed forsuch conditions or for any expertise or engineering knowledge required todiscover them.

5

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Any unknown conditions existing at the time of inspection could alter the6

6

Any unknown conditions existing at the time of inspection could alter thevalue. No responsibility is assumed for latent defects of any nature which mayaffect value, nor for any expertise required to disclose such conditions.Valuer who performed this valuation has no present or prospective interest inthe subject property. Compensation for the valuer is not contingent on thereporting of a predetermined value or direction in value that favours the causeof the client This valuation is performed in a manner that is independent

6.

7.

Purpose and Intended Use of the Valuation

of the client. This valuation is performed in a manner that is independent,impartial and objective.

Ⅷ．

Intended User(s)

Purpose and Intended Use of this valuation is to assist the financial institution inassessing the collateral value.

Ⅸ．

1

This report is intended for use only by the lender/client.

Valuation Process

General Factors

Ⅹ．

< Economic conditions >

1. General Factors

In Japan, poor economic conditions had continued about 1.5 decades since thecollapse of the bubble economy (from 1991). Government had introduced variousanti-deflation measures. Bank of Japan had continued ultra-low-interest ratepolicy But as a whole Japanese economy had been under severe condition for a

Afterwards, US subprime loan problem came to light in the latter half of 2007,and its influence on the world economy is concerned, nowadays.

But recently flattening-off trend is becoming clearer. Stock price had hit thebottom in 2003 and then it turned up. Corporate activities also turned up.

policy. But, as a whole, Japanese economy had been under severe condition for along time.

Also, in real estate dealing market, after the collapse of the bubble economy,demand had diminished under the sluggish economy. Although the transition of

According to the “Cabinet Office Economy Watchers Survey” in January 2008,on the whole, the economy is recovering moderately.< Land price trend >

6

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land price differs with areas, decline trend continued for over ten years.

7

land price differs with areas, decline trend continued for over ten years.But recently flattening-off trend is becoming clear in the metropolitan areas.

And there seems Mini-bubble-phenomenon in some particular areas.According to the public survey of land price as of 1 July 2007, national average

of residential land price declined by 0.7% per year, and commercial land pricerose by 1.0% per year. The average land price seems to be ending its declinationof 16 consecutive years

Main cause of it is that the three metropolitan areas (Tokyo, Osaka, andNagoya) where demands for condominiums and offices are steady have pushedup the average land price. Average land price of the commercial area of theseareas rose by 10.4% per year. In Tokyo it rose by 17.2%, and in Osaka it rose by10.4%. The land price began to rise in the local core cities such as Sendai andF k k L d i d fl i f h ll f h b bbl

of 16 consecutive years.

Fukuoka. Land price deflation after the collapse of the bubble economy seems tobe finished in these major areas.

On the other hand, in local areas, land price declined both in the commercialareas and residential areas, 15 years in a row. Decline trend is continuing still inthese areas. Diversity became larger between measure areas and local areas.

One of the main factors of the land price rising in the three metropolitan areas isOne of the main factors of the land price rising in the three metropolitan areas isthe huge investment money. Investment money concentrated on the real estatesthat would generate yield and gain. On the other hand, in local areas wherepopulations are decreasing, yields could not be expected, so the investmentmoney also could not be expected.

< Transition of Published land price near the subject property >

index

1,084,615

85.6

year

1,192,308

100.0

74 0

yen/sq.m

77.9

1998

< Transition of Published land price near the subject property >

2001

1,392,308

2000

1999

1 030 769 100.0

120.0

140.0

Transition of land price

74.0

1,153,846 82.9

1,023,077

73.5

2001

2006

1,023,077

2004 73.5

75.1

2003 73.51,023,077

1,030,769

1,046,154

2002

20050.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007


104.4

< Market trend of real estate investment such as J-REIT >

1,453,846

J-REIT (Japan Real Estate Investment Trust) was founded in 2001. The new

2007

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007


7

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listing increased rapidly from 2005 to 2006 and the market price rose remarkably

8

< Average Cap-Rates of newly purchased J-REIT properties >The average Cap-Rates of Direct Capitalization Method that were used in thel ti f J REIT' l h d ti i th t 3 i T k

However, the US subprime loan problem came to light in June, 2007. Theworldwide financial crisis occurred and the market changed into decline.

listing increased rapidly from 2005 to 2006, and the market price rose remarkablyfrom the latter half of 2006 to the first half of 2007.

valuations of J-REIT's newly purchased properties in the past 3 years in Tokyo23 wards are as follows.

<Residential Property>

Years old StoryNumber

purchasedSum of the

purchase priceSum of the

valuation valueAverage

Cap-Rates

under 10 years under 20 story 437 ¥779.9billion ¥781.9billion 4.93%

¥35.9billion 4.63%

8 ¥99.6billion

¥35.8billion

5.41%

¥100.1billion 4.63%

10 years or more 20 story or more

20 story or more

10 years or more 125 ¥97.8billion ¥99.2billion

4

under 20 story

< Condominium market trend >

under 10 years

According to the National Real Estate Information Centre, the average unit priceof the new condominiums in Tokyo metropolitan area rose by 13.8% per year in2007.

In Tokyo 23 wards it rose by 22.50%. In Tokyo Santama Area it rose by 11.6%.In Kanagawa Prefecture, it rose by 8.4%. In Saitama Prefecture, it rose by 9.3%.In Chiba Prefecture, it rose by 14.7%. In Ibaraki Prefecture, it rose by 11.5%.

JPY

10,000yen/3.3sq.m.

Rate/Year

1990

10,000yen

Av. Price

1 225 9 100 0

In Chiba Prefecture, it rose by 14.7%. In Ibaraki Prefecture, it rose by 11.5%.

In this table we can see the transition of average unit price of newly builtcondominiums in this area.

< EF Ward > 10,000yen

2 115 185 5 704

Av. AreaYear Bldg. U. Price Indexsq.m.

6 141

sq.m.

< Transition of average unit price of newly built condominiums in this area >

15 001 40 5

Units

1993

1,075.1

4,788 22.5

450,108

1990

57.5 △ 34.5

3 251991

60.2

15 71,820 337 704.5

26.4

8 165

55.531.0 △ 26.1

1,225.9 100.0

87.7 18,004 55.4

5,578

6,375

1,543,402 9,354

2,115,185 5,704

9,940

56.9

6 141

1994 12 380 2,422,532 21,105 379.5

1995 8

1,384

1

15,001

244 1,361,089 13,881 324.1 △ 14.6

△ 12.3

40.5

41.9 △ 27.1

1992

513.3

27.3 8.4 5,639 55.7

25.2

3.9919 5,999,875 64.16,5291996 34

1997 65 26.7 △ 2.7

1,075 5,816,330 62,291

△ 11.7 5,256

308.7

58.8

58,916

△ 5.8 5,411

106,275 327.5

1998 61

2000 70 1,909 10,034,400

57.9

1999 71 1,995 11,248,900 111,150 334.6

6,374

24.1

64.3

336.7 27.5

112,289 295.4

1,652 10,529,130

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SAMPLE

2001 54 8,720,414 81,576 353.41,443 28.8 19.6 6,043 56.5

9

4,926

16 677

25.3

27.4 8.4

2006 9 209

50.8

2003 51 1,584 6,334,565 67,488 310.3

9,591 78.2

617 3,565,392 35,185

1,279 6,300,076 61,918 336.4

335.0 27.3 △ 0.4

2,004,580 16,338 405.6

5,779

2004 52

52 724 663

33.1 21.1

89 0

57.0

2001 54 8,720,414 81,576 353.4

2005

1,443

13 50 5

27.3

△ 7.4 3,999

277 4 619 550

48.4

26

2007

38 1,113 5,737,710 56,583 335.2 △ 5.1 5,155

28.8 19.6 6,043 56.5

619 2

42.6

2002

16,677

< History of EF Ward >

General Condition of Community

52.724,663 89.013 50.5277 4,619,5502007 619.2

2.

After the World War II, the commercial area around the EF Station hadrecovered as a place of popular resort. After 1960s, high-rise buildings had been

EF Ward was born in 1932 as a ward of Tokyo City. It is located in the east ofTokyo, and southwest of Tokyo-23-wards. It has a total area of 15.11 squarekilometres, and is located on the Yodobashi-tableland of which altitude is 30 to60 meters.

recovered as a place of popular resort. After 1960s, high rise buildings had beenconstructed rapidly. After the Tokyo-Olympics in 1964, urban renewalconstructions had been continued. Afterwards, it has grown into one of the mostfamous commercial areas in Japan.

EF Ward also includes some of the most famous high-grade residential areas inTokyo. Especially, Shoto area and Yoyogi-uehara area are famous high-graderesidential areas.residential areas.

At the peak, EF Ward had population of around 285,000 and number ofh h ld f 93 000 i 1963 Aft d th l ti h d d d

< Population >

And EF Ward is also a famous educational city in which many culturalfacilities, foreign embassies, and universities are located.

household of 93,000 in 1963. Afterwards, the population had decreased(particularly in the bubble era). It was backed by the decline of birth rate,progress of the aging society, and rapid land price hike.

But, after 1997 the population increased under the land price decline.Particularly, the number of household increased according to the increase ofnuclear families. The average household is 1.7 recently. In 2007, the populationi d h b f h h ld i

PopulationYear

114,440

30/Jun/1990

30/Jun/1985 232,531

is 197,852, and the number of household is 117,776.

30/Jun/1980 240,418

Household

207,822 104,465

112,591

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SAMPLE

96 51530/Jun/1995 184 880

10

187,948

30/Jun/2005 194,891 113,023

116,85030/Jun/2006 197,620

30/Jun/2000

30/Jun/2007 197,852 117,776

96,515

103,894

30/Jun/1995 184,880

< Transportation >JR Yamanote Line, JR Chuo Line, JR Saikyo Line, JR Shonan-Shinjuku Line,

Tokyu-Toyoko Line, Tokyu-Den-en-toshi Line, Keio Line, Keio-Inogashira Line,Odakyu Line, Ginza Subway Line, Hibiya Subway Line, Chiyoda Subway Line,Hanzomon Subway Line, Shinjuku Subway Line, and Oedo Subway Line runh h hi dthrough this ward.

Municipal bus line and private bus lines are running throughout the ward.Traffic system is quite convenient in this ward.

Now new subway line (Fuku-toshin Subway Line) is under construction.Operation is scheduled to start in June, 2008. It will connect three big stations i.e.PQR, STU, and EF.

Gaien-nishi-dori Avenue (prefectural belt line), Meiji-dori Avenue (prefecturalbelt line), Yamate-dori Avenue (prefectural belt line), Koshu-kaido Avenue(national road), Route 246 (national road), Expressway No.3, and ExpresswayNo.4, etc., run through this ward.

y q

< Roads >

< C i l B >

< Infrastructure >

No.4, etc., run through this ward.

The diffusion of public water service, public sewage service, and city gasservice are almost 100%.

Harajuku area and Jingumae area are one of the most famous fashion centres inJapan. Shopping area along the Omotesando Street is changing into the mostfamous high-class fashion centres in Japan. Commercial area around the EbisuStation is a famous business and shopping area. Area around the Daikan-yamaStation has been redeveloped into a fashionable commercial area. Yoyogi area isl d h Shi j k S i d hi h i b ildi h b

< Commercial Base >

located near the Shinjuku Station and new high-rise buildings has beenconstructed recently.

Commercial areas in EF Ward have broad trading areas which expand to Tokyo,< Trading area and Customers >

10

SAMPLE

Kanagawa, and Japan.

11

Kanagawa, and Japan.

EF Ward had been a famous commercial and residential area for a long time.Many head offices of IT related industries are concentrated in this ward. And,nowadays, construction project of a new subway line, reconstruction project ofthe Tokyu Bunka kaikan redevelopment project of the Sakura gaoka area etc

< Future Trend >

the Tokyu-Bunka-kaikan, redevelopment project of the Sakura-gaoka area, etc.,are proceeding.

This ward would keep the supremacy also in the future as one of the mostfamous commercial and residential area in Japan.

3.

650 mAbout

Location and Transportation

Nearby railroad station:

Direction and distance (road line) from the nearby railroad station:Northeast

EF station on the JR Yamanote Line

4.

(1)

I identified the subject neighbourhood in the following range on the front

Range

General Condition of Subject Neighbourhood

About m

I identified the subject neighbourhood in the following range on the frontstreet, starting from the subject property.

WestmEast 150

150About

　

(2)

Paved public road of 8m width is considered to be standard in this area, andarrangement and continuity of the streets are rather good.

Characteristics of the Subject Neighbourhood

< Street condition >

Access to the nearby railroad station:Access to the nearby shopping centre:

Considerably good

Considerably good

< Access >

Considerably goodAccess to the public offices:

11

SAMPLE

12

< St d d f l d i th >

< Environmental conditions >

High-rise condominium buildings are located in this area. This area isallowed to use a higher Maximum Floor Area Ratio to build condominiums.

Site of a condominiumStandard lot size: Around 5000 square metersWidth of the road:

Standard use:

< Standard use of land in the area>8m width public road

< Future trend >

The property-specific value factors of subject land are as follows.

General Condition of Subject Property, and Zoning5.

Few factors are observed which change the subject neighbourhood in thenear future.

p p y p j

Street conditions

Ground height

(1)

Width Classification

Lot which fronts to three streets

Direction

< Lot classification >

< Condition of the streets >Pavement

N l fl t

Public roadPavedPaved

Ground height

around 8.0mSouth Public road

Width

(2)

WestEqual level

around 10.0m

Lot conditions< Topography >

Equal levelClassificationDirection Pavement

Nearly flat

X< Dimensions >

< Shape >Close to trapezoid

90 m 70 mAround

< Public water service >ServedServedServed

(3)< Electric power service >

< Public sewer service >

Lifeline

< City gas service > Served

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SAMPLE

13

(4)

The City Planning Area is the place to which the city plan is designatedand the City Planning Law and other related laws are applied. Cityl i i i i l l b i d t i Cit Pl i A Th

Zoning Districts

Located in the: Urbanization AreaDesignated ..

< Designation as the City Planning Area >

< Local Zoning Regulations >

planning can in principle only be carried out in a City Planning Area. TheCity Planning Area, whose purpose is to regulate city development andprevent urban sprawl, is divided into 2 areas: the Urbanization Area and theUrbanization Control Area. The City Planning Areas that have not beendivided are called the Undivided City Planning Area.

This zone is targeted at the residential areas where shops and officescoexist. This zone is established to provide living areas where

Range:

The subject property is located in an area designated as the:Second-type Residential Zone

Basic Zoning:Whole subject land

%

p gdevelopments are regulated mainly to protect residential environment.

(Article 52 2nd clause of the Building Standards Law)* Restriction by the front street width:

Maximum Building Coverage Ratio:% ... *

60

Not applied

<Building Restriction>

Maximum Floor Area Ratio: 200

(Article 52, 2nd clause of the Building Standards Law)

Present use of the land

Subject Building

Site of a condominium(5)

(6)< C l ti f t ti >

February 1, 2003

< Present use >Condominium unit

< Grade of materials and construction >( 5.0 years old )

< Completion of construction >

Considerably good

Considerably good< Degree of depreciation >

< Maintenance and management >Considerably good

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14

< Hi h t d B t U f th S bj t P t I d >

< Highest and Best Use of the Land as though Vacant >I think the Highest and Best Use of the subject land as though vacant is the

use as the site for condominium.

6. Highest and Best Use

I think the Highest and Best Use of the subject property as improved is theuse as the condominium unit.

< Highest and Best Use of the Subject Property as Improved >

14

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15

In this valuation, I applied Cost Approach, Market Approach, and IncomeApproach to estimate the value of subject property.

Application of Valuation Methods7.

Value of the Condominiumi.

Cost Approach

a. Land Value

A.

(1)

In built-up areas, we can hardly apply Cost Approach for lands. It is commonalso in other countries.

Market Approach (Land)

In this valuation, I applied Market Approach and Income Approach toestimate the value of subject land.

See Sheet-ⅠJPY 1 384 000 per sq m

( ) pp ( )I collected a lot of comparables of land transaction in the subject and

comparable neighbourhoods. Then, I compared the subject land with thecomparables from the viewpoint of market-specific value factors and property-specific value factors.And I estimated the “Value indicated by the Market Approach” for:.. .. See Sheet-ⅠJPY 1,384,000 per sq.m.

(2)On the assumption of construction of an office building for rent, land value

was indicated by the land residual method.All expense was deducted from all income which would be generated from the

d i d t d N t O ti I (NOI) i di t d

Income Approach (Land Residual Method)

Sheet-Ⅱ

assumed improved property, and Net Operating Income (NOI) was indicated.Then NOI that belongs to the building was deducted from it, and NOI thatbelongs to the land was indicated. NOI that belongs to the land was divided byappropriate capitalization rate.And I estimated the "Value indicated by the Income Approach" for:.. JPY 1,360,000 per sq.m. .. See

ReconciliationDiversity resulted among indicated values.

Sales Comparison Method was applied with comparative study of many recentcomparables. Various comparisons were performed suitably by checking the

(3)

15

SAMPLE

value factors. They are credible and reliable. So, the indicated value reflects the

16

value factors. They are credible and reliable. So, the indicated value reflects thereality of the market at the effective date of the valuation.

The Value indicated by the Income Capitalization Method is the total presentvalue of net return expected from the subject land in the future. It isconsiderably difficult to forecast the future NOI. However, it reflects theincome-producing capacity in which the essence of the economic value iscreated Therefore it must be esteemed as a verification means of value

I re-examined each stages of valuation process objectively and critically, andreconsidered the feature of the methods and data.

Gov. published land price was also taken into account. And I estimated thevalue of subject land to be:

created. Therefore, it must be esteemed as a verification means of value.

Land ValueLand AreaUnit Value

Materials of the building, the grade of construction and the trend of thebuilding costs were examined, and I estimated the subject building

1,384,000 per sq.m. X ≒

Reproduction Cost of the Buildingb.

.. JPY 4,279,500,000.-3,092.16 sq.m.

g , j greproduction cost as follows.

Construction cost hike came to light in the latter half of 2007 Contractors’

Japanese real estate market is now under the condition that is not easilyforeseeable due to the economic uncertainty. In addition, as a result of therevision of the Building Standards Law in June 2007, building confirmationprocedures stagnated.

Construction-cost-hike came to light in the latter half of 2007. Contractors’estimates soared by 10% to 20% until the end of 2007. One major factor is theprice-hike of construction materials such as steel according to the increaseddemand in emerging economies such as China. Another major factor is thestagnated building confirmation. Since the number of constructions decreasedsharply in a short term, contractors started to raise their charge to avoid theirfinancial troubles

Ordinary overheads of the condominium construction were estimated to be:

In this valuation, although depending on the standard cost, cost hike is alsotaken into account, I estimated the reproduction cost as follows.

.. ≒

Unit Cost

financial troubles.

JPY 1,588,500,000.-257,000 per sq.m.Building Cost

XTotal Floor Area6,180.74 sq.m.

→ 20% of the sum of Land Value and Building Cost.→ 4,279,500,000 ＋ 1,588,500,000 ≒ JPY 5,868,000,000.-

1,173,600,000 ≒ JPY 2,762,100,000.-

JPY 1,173,600,000.-

1,588,500,000 ＋→

→

Reproduction cost which includes ordinary overheads was estimated to be:5,868,000,000 × 20% ≒

16

SAMPLE

17

＝

Reproduction Cost of the Condominium

JPY 7,041,600,000.-

The land value indicated by (a.) were added to the reproduction cost of thesubject building indicated by (b.), and I estimated the Reproduction cost of thesubject property to be:.. 4,279,500,000 + 2,762,100,000

c.

Depreciated value (based on physical, functional, economical factor, which isestimated by the methods based on economic life and observation) wasdeducted from the reconstruction cost of the subject property, and I estimatedthe "Value indicated by the Cost Approach" of the whole condominium to be…

Depreciationd.

<Calculation process>

JPY 2,467,500,000.-Building value ..Land value ..

JPY 6,747,000,000.-

JPY 4,279,500,000.-(Items)..

Salvage value of skelton:Building ..

100% ≒

0% is estimated

Land ..4,279,500,000

p

Salvage value of installations:

XStraight line method

JPY 4,279,500,000.-0% is estimatedDevaluation according to the unsuitable use:

0% is estimated( - / )

( - / )≒X

subtotal+ 552,420,000

2,762,100,000

2,762,100,000

JPY 2,467,500,000.-

1Salvage value of installations:

X ×≒ JPY 2,099,200,000.-+

1

X × 100%X

install.: 100%

0.80skelton:

X

5.0 100

0%

D l ti b d b ti 0% i ti t d

JPY 368,300,000.-0.20 5.0 15

X2,209,680,000 0%

0% is estimated

JPY 368,300,000.-install.: 100%Xskelton: JPY 2,099,200,000.-

Marketability as a combined property

≒

X ≒

2,099,200,000Devaluation based on observation:

subtotal

0% is estimated

368,300,000

Devaluation according to the combination:

100%

JPY 2,467,500,000.-

0% is estimatedJPY 4,279,500,000.-

e. Ratio of Utility

Building ..100%4,279,500,000Land ..

X≒X

JPY 6,747,000,000.-Total2,467,500,000 JPY 2,467,500,000.-100% ≒

17

SAMPLE

18

0.132774

ii. Value of the Subject Unit

Floor utility ratio:Situation utility ratio:

I evaluate the ratios of utility as below. .. See Attached Sheet-Ⅲ0.102811

Whole condominium value was multiplied by Floor utility ratio and Directionutility ratio, and I estimated the "Value indicated by the Cost Approach" to be...

6,747,000,000 ×Whole condo value Floor Situation

0.102811 × 0.132774 ≒ JPY 92,100,000.-

B. Market ApproachSales Comparison Method was applied with comparative study of many recent

comparables. Various comparisons were performed suitably by checking thevalue factors. They are credible and reliable. So, the indicated value reflects thereality of the market at the effective date of the valuation.yAnd I estimated the "Value indicated by the Market Approach" to be…

Note:

The resale prices have exceeded the prices of their new condo sales

Along with the market recovery, investment money flowed into the skyscrapercondominiums in the central Tokyo, and their price soared.

.. JPY 92,200,000.- .. See Sheet-Ⅳ

The resale prices have exceeded the prices of their new condo sales.Sometimes it has been higher by 70% to 110%.

However, the property investment declined as the subprime loan problemcame to light.

So, in this valuation, -25% sale condition adjustments were applied to thecomparable of which cap-rates were too low.N t

2003 when this condominium was newly sold is the time when the averagesale price of the newly built condominiums in this area had been lowest afterthe bubble economy collapsed.

Note:

18

SAMPLE

<Average sale price in EF Ward (JPY10000/3 3sq m )>

19

336.7

1991 1992 1999 2000 2001 2006 20071993 1994 1995 1996 1997

<Average sale price in EF Ward (JPY10000/3.3sq.m.)>

19981990

##### ##### 704.5 513.3 379.5 324.1 353.4 335.2 310.3 619.2336.4 335.0 405.6

2005

327.5 308.7 334.6 295.4

2002 2003 2004

800

1000

1200

1400

0

200

400

600

800

1000

1200

1400

0

200

400

600

800

1000

1200

1400

All expense was deducted from all income which would be generated from thesubject property, and the Net Operating Income (NOI) was indicated. Then theNOI was capitalized by the appropriate capitalization rate.

C.

Sheet-ⅤJPY 94 800 000 - See

Income Approach (Direct Capitalization Method)

And I estimated the "Value indicated by the Income Approach" to be…Sheet-Ⅴ

D.The future income, expense, capital expenditures, etc. were analysed. And the

future cash flow which subject property would generate was indicated. Then theNet Cash flow was discounted to the present value by the appropriate discount

JPY 94,800,000.- .. See..

Income Approach (DCF Method)

.. See Sheet-Ⅵ.. JPY 90,900,000.-

Net Cash flow was discounted to the present value by the appropriate discountrate.And I estimated the "Value indicated by the Income Approach" to be…

As above mentioned,Value indicated by Cost Approach: JPY 92,100,000.-

JPY 92,200,000.-

E. Reconciliation and Final Opinion of Value

Value indicated by Market Approach:

19

SAMPLE

JPY 94 800 000 -Value indicated by Income Approach (Direct):

20

Value indicated by Income Approach (DCF):JPY 94,800,000.-JPY 90,900,000.-

Value indicated by Income Approach (Direct):

Diversity resulted among indicated values.Cost Approach was applied with comparative study of many recent land sales.

Various comparisons were performed suitably by checking the value factors.They are credible and reliable And building value was indicated by suitable

Sales Comparison Method was applied with comparative study of many recentcomparables. Various comparisons were performed suitably by checking thevalue factors. They are credible and reliable. So, the indicated value reflects the

They are credible and reliable. And building value was indicated by suitablecalculation. So, the indicated value has reliability. This indicated value isrespected in sales of owner occupied properties other than condominium inJ

reality of the market at the effective date of the valuation. This indicated value isrespected especially in owner occupied condominium unit in Japan.

Income Approach indicates the total present value of net return expected fromthe subject property in the future. It is considerably difficult to forecast the futureNOI or Net cash flow. However, it reflects the earning power in which theessence of the economic value is created. This indicated value is especially

I re-examined each stages of valuation process objectively and critically, andreconsidered the feature of the methods and data. And, I estimated the value ofthe subject property to be:.. JPY 92,200,000.-

respected in sales of leased fee properties in Japan. Therefore, it must bet d

≒

58,500,000

(Excluding consumption tax)33,700,000

≒

Values were divided in proportion to the value indicated by Cost Approach.

Building value ..92,200,000Land value ..92,200,000 ÷

6747.06747.0

÷X

4279.52467.5

X

20

SAMPLE

category 100 140 100 100size 100 100 100 120date ① ②

category 100 133 100 100 90size 100 100 120 121 100date ③ ④ ⑪ JPY/sq.m.

category 100 120 100 100size 100 100 90 121date ⑤ ⑥

category 103 100 100 90size － 100 100 102 100date ⑦ ⑧ ⑪ JPY/sq.m.

category 103 100 100 90size － 100 100 100 100date ⑨ ⑩ ⑪ JPY/sq.m.

100 100 100 100 100 100 100 100 100 100 100 100 100100 100 100 100 100 100 100 100 100 100 120 100 120

① ②100 100 100 100 100 100 100 100 100 100 100 100 100100 100 100 100 120 100 120 100 101 100 120 100 121

③ ④100 100 100 100 100 100 100 100 100 100 100 100 100100 100 100 100 90 100 90 100 101 100 120 100 121

⑤ ⑥100 100 100 100 100 100 100 100 100 100 100 100 100100 100 100 100 100 100 100 100 102 100 100 100 102

⑦ ⑧100 100 100 100 100 100 100 100 100 100 100 100 100100 100 100 100 100 100 100 100 100 100 100 100 100

⑨ ⑩100 100 100 100 90 100 90100 100 100 100 100 100 100

⑪

mean

Comparison

JPY/sq.m.

1,453,846 JPY/sq.m.

ＬＰ1-chome,

ＥＦ 1-chome,

ＥＦ 4-chome,ＥＦ-ku

ＥＦ-ku

A

Gv. Published Land Price

ＧＨ-cho,ＥＦ-ku

B

Cbuilding site

P.2

1

Factors

Time adjustment

IndicatedLand value

1,538,000

－

Land Sale Comparables Analysis

1,319,323

～

1,453,800

building site340.85sq.m.

748.49sq.m.May 10,2007 JPY/sq.m.

358.00sq.m.

Market

01 January 2007

－

Memo

building site

～

α

β

A

B

regulation

Jan 01,2008

other

JPY/sq.m.

Jan 01,2008

street

Sub.L

.

street

Property-specific value factors and standardizing (D)

site

β

totalaccessenviron-

mentregulation

C

α

Location Category, size, dateions (B)

ＥＦ-ku

Sale price

(A)

Sale condit

826.54sq.m.

Aug 07,20061,695,588

JPY/sq.m.

factors

Property

Nov 30,2005 JPY/sq.m.

1,553,121

building site1,378,033

JPY/sq.m.

1,607,705

factors (E)

Adjusted sale priceTime adjus

tment (C)

Standard

izing(D)

Adjusted price

A×B×C×D×E

1,384,000

0

other

Market-specific value factors (E)

JPY/sq.m.

－

JPY/sq.m.

Memo

JPY/sq.m.

－

1,321,000

totalaccessenviron-

ment

JPY/sq.m.

01 January 2006

08 February 2008～01 January 2008

31 December 200631 December 2007

SheetⅠ- 1

+ 2.7%

+ 10.3%+ 26.0%

SheetⅠ

- 1

SAMPLE

P.2

2

Other

Regulation factors

OtherMaximum floor area ratio + 20 + 20 + 20

Pollution, Noise

ShapeSizeGround height

Street

Access

Environment

Administration

Site

Street

Access

Administration

Other

Living Env., Commercial Env.

Other

Other

Other

Environment

OtherMaximum floor area ratioRegulation factors

Corner lot, etc.

Comparable ＢComparable Ａ Published β Subject Land

SheetⅠ

- 2

Property Factors

Market Factors

Arrangement, ContinuityPavementOtherStation, Bus stopShopping centre, City officeOtherPollution, NoiseResidential, Commercial

MemorandaComparable Ｃ Published α

+ 10 corner lot- 10

- 20+ 20

Value Factors SheetⅠ- 2

Shopping centre, City office

Arrangement, ContinuityPavement

Other

Station, Bus stop + 1 + 1Other

+ 2

SAMPLE× ×

(

1 ／

×× （ 1 + ）

× ＋ ×

(A) NOI (Income - Expense) =(B) NOI (Building) =(C) NOI (Land) (A) - (B) =(D) NOI (Land) (C ＝）（ JPY 1,360,000/㎡0.94493

Land Value:

JPY 222,572,136.-JPY 210,315,089.-

on account of construction term .. (rate)

JPY 327,549,359.-JPY 104,977,223.-

JPY 19,785,913

JPY 68,168,897

year

⑨ Other expense

⑦ Replacement-A.⑧ Other expense

JPY 0

(D) ÷

0.003

20 %0.096342

JPY 257,000/㎡

80 %

6,180.74 ㎡

year

year

Annual Amortization)

P.2

3

2. Calculation of Income

596.88㎡508.09㎡518.43㎡

450.81㎡

JPY 15,360,000

⑥ Total

⑤ Charges forCommon area

N-refundable depositJPY 11,298,136

① Rent JPY 30,602,000 ×

6years

JPY 1,836,120

JPY 367,224,000

8F 5,807/㎡

6F7F

Sum

440.96㎡

6,292,0002,816,000 5,632,000

③ P. Tax

② Management fee

3.0%

① Cost of repair

5,369/㎡ 3,146,000

Calculation Process

5,975.60㎡

12months

586.00㎡

96.7% 61,204,000

（F.Value／B.Value）

JPY 1,593,200

④ Insurance

JPY 4,149,403JPY 13,542,200Bldg

Building ValueItems

（ ① ～ ⑨ ）⑩ Total

（ ① ～ ⑤ ）

32 ×

%

⑤ C-loss-A. JPY 0⑥ Vacancy loss

12months

0.0

3.0%

ｇ： Growth Rate

JPY 0

Refundable deposit

Items

Conditions

98.0%97.8%

5F

JPY 4,206,300,000.-≒

6,180.74

Initial Investment

JPY 104,977,223

JPY 1,593,200,000

0.058278

0.001

Memo

×

Land

5,632,000

0.0658908

NOI （①×②）

5,122,000

Sheet-

Ⅱ

Estimate

×JPY 395,718,256 ×

JPY 1,593,200,000

0.5

JPY 11,016,720

1,593,200,000

（ r-g）

5.0 %

5. NOI (Building)

② PI-increasing

JPY 16,488,261

JPY 0

JPY 1,593,2000.017

Amortization rate③ Building

Frame Installations

JPY 22,046/㎡

① Building

㎡

㎡

Available Area3,092.16

Calculation Process

17.2 ％Unit price / SiteExpense Ratio

24

JPY 1,593,200,000

0.001

0.03×

Building Area

1,006.00㎡

942.70㎡ 928.57㎡

Income Capitalization (Land Residual Procedure)

×

652.56㎡

5,122,000

Building Value

In this sheet, new highest and best use building is assumed tobe constructed.

8,110,000

6,292,000

Structure

×

Calculation ProcessJPY 395,718,256

Estimate

JPY 367,224,000

Sheet-Ⅱ

0.05

4,643,0004,055,000

9,466,000

1. Conditions of Lease

Total

JPY 1,593,200,000.-

Condominium

㎡

5,542/㎡

98.5%98.5%

Site Area 3,092.16

98.4%

1,125.20㎡1,081.36㎡

801.15㎡4F3F

787.99㎡

5,189,0001F2F

20

664.21㎡ 98.2%98.2%

5.0

NR-Deposit

6,918,000

R-Deposit9,466,000

8,110,0006,918,000

4,733,0001,065.43㎡ 4,871/㎡

5,000/㎡5,147/㎡

9,286,000 9,286,000

3,459,0005,300/㎡

10,378,000 10,378,000

6. Value indicated by Income Approach

③ Interest on

0.184598×

JPY 395,718,256

JPY 61,204,000

④ Parking lot fees ×JPY 40,000

ａ： Frame

15.0

ｒ： Basic Rate %

3. Interest Rates

%

%

m ： Construction term

nb ： Economic Life (Install.)

40.0

％Floor Rentable AreaTotal Area89.4%

61,204,000

1.0

JPY 61,204,000② Interest on

Unit Rent4,704/㎡

Rent / Month

6,180.74㎡

2,561,000

30,602,000

na ： Economic Life (Frame)

4. Calculation of ExpenseItems

ｂ： Installations（I.Value／B.Value）

80

SAMPLE

Sheet-Ⅲ

① ② ③ ④ ⑤ ⑥ ⑥

Floor Floor GLA Utility Others Utility Utility Utility

Amenity (sq.m.) Product (sq.m.) Product Product Ratio

①×② ①×④ ③＋⑤ ⑥÷⑥sum

8F 1.161 440.96㎡ 512.162 0.000 512.16 0.083682

7F 1.108 508.09㎡ 563.123 0.000 563.12 0.092009

6F 1.074 586.00㎡ 629.239 0.000 629.24 0.102811

5F 1.060 652.56㎡ 691.734 0.000 691.73 0.113022

4F 1.029 787.99㎡ 811.091 0.000 811.09 0.132524

3F 1.000 928.57㎡ 928.570 0.000 928.57 0.151719

2F 0.974 1,065.43㎡ 1,037.869 0.000 1,037.87 0.169577

1F 0.941 1,006.00㎡ 946.541 0.000 946.54 0.154655

s.sum 5,975.60㎡ 6,120.328 0.00㎡ 0.000 6,120.33 0.999999

other 0.000 0.000 0.00 0.000000

sum 5,975.60㎡ 6,120.328 0.00㎡ 0.000 6,120.33 0.999999

① ② ③ ④ ⑤ ⑥ ⑥

No. Direction GLA Utility Others Utility Utility Utility

Amenity (sq.m.) Product (sq.m.) Product Product Ratio

①×② ①×④ ③＋⑤ ⑥÷⑥sum

601 1.081 77.54㎡ 83.833 0.000 83.83 0.140242

602 0.982 72.62㎡ 71.343 0.000 71.34 0.119348

603 0.991 72.62㎡ 71.982 0.000 71.98 0.120416

604 1.000 72.62㎡ 72.620 0.000 72.62 0.121484

605 0.996 63.73㎡ 63.446 0.000 63.45 0.106137

606 1.095 81.83㎡ 89.566 0.000 89.57 0.149832

607 0.977 67.13㎡ 65.616 0.000 65.62 0.109767

608 1.019 77.91㎡ 79.369 0.000 79.37 0.132774

s.sum 586.00㎡ 597.775 0.00㎡ 0.000 597.77 1.000000

other 0.000 0.000 0.00 0.000000

sum 586.00㎡ 597.775 0.00㎡ 0.000 597.77 1.000000

P.24

(According to the floor)

Ratio of Utility

(According to the situation on the floor)

SAMPLE

① ／ ≒② ／ ≒③ ／ ≒④ ／ ≒⑤ ／ ≒

％

① × ％ × ％ × ／ ≒② × ％ × ％ × ／ ≒③ × ％ × ％ × ／ ≒④ × ％ × ％ × ／ ≒⑤ × ％ × ％ × ／ ≒

／㎡ 100 100.0 107.4 105.0

Very good

Location

(See: Ratio of Utility)

Direction/view/room

(See: Ratio of Utility)

Floor location

Actual age

～6 min. ～10 min. ～15 min.

LeaseholdSurface right

sale price

Fee simple

Sunshine/VentilationNot good Not so good

6 3

75,000,000 67.13 1,117,235

0

(sq.m.)(JPY)

to station

to bus stop

to station

min.

min.～10

～3

～3 min.

Condo Sale Comparables AnalysisSheet-Ⅳ

Effective Date:

Sale price GLA Unit price

82,250,000 72.62 1,132,608

08/Feb/2008

72,000,000 63.73 1,129,76695,500,000 81.83 1,167,054

SubCom①

Com②

Com③

Com④

Com⑤

89,200,000 77.91 1,144,911

Value factors

(JPY/sq.m.)All comparables are in the same condominium project.

Items

（ａ＋ｂ

）

BUS

0 -5 -10

0 -3 -8 -16

FT

min. min. min.

0 -5 -10Leasehold/Fee simple

5 0 -5 -13

min. min.～15 ～20

～6 ～10 ～15

-2.6

-1.0 -1.0 -1.0

7.4 10.8 6.0 6.0 0.0

Not so good Normal Good Very good

0 -3 -5Environment

Not good

-3 -63 0

-10

Design/ConstructionNot good Not so good Normal Good Very good

6

5

-3

-2.5 -5 -10 -15

-6

Normal Good Very good

Normal Good

Noise/VibrationNot good Not so good

0

Other value factors

-3 -1.5 0 3Common elements/rec.

0㎡～ 5㎡～ 10㎡～ 20㎡～ 30㎡～

6 8 10

40㎡～ 50㎡～

-2.6

0

sale condition time adjustment above adjustment

Time adjustment 0.0 months

sum 7.4 9.8 5.0 5.0 0.0

411 11 8

P.25

1,262,0371,183,561

1,199,672

(JPY/sq.m.) × 77.91

1,144,911 ／㎡ 100 100.01,117,235 ／㎡ 100 100.0 107.4 100.0

Indicated value: 1,183,561 sq.m. ≒

107.4 97.4Average:

1,167,054 ／㎡ 100 100.0 107.4 105.0

JPY 92,200,000.-

(JPY/sq.m.)

(JPY/sq.m.)

(JPY/sq.m.)

(JPY/sq.m.)

(JPY/sq.m.)

(JPY/sq.m.)

1,132,608 ／㎡ 100 100.0 107.4 109.8 1,107,3151,155,3261,193,457

1,129,766

SAMPLE

＝＝＝＝

Risk-free rate

Real estate premium

Other risks

Levelled Capital ExpenditureNet Operating Cash Flow

5. Net Operation Cash Flow

JPY 0

JPY 54,100

⑧ Other expenses JPY 0JPY 0

⑥ P. TaxLand

⑦ Insurance

/Collection loss

0

JPY 5,317,380 × 1 ／

(A)

(C)

⑤ L-commissions JPY 0

12 ヶ月

JPY 20,710,897 ×

BldgD.A.

JPY 176,300 Actual due

12

0.001 Actual due

JPY 20,711JPY 0

JPY 120,000 12

Actual due

JPY 0

JPY 0×

JPY 15,000

JPY 10,000

Sheet-

Ⅴ

Operating expense ratio: 10.8 ％

≒

Cost of Equity

JPY 551,111

Income Capitalization (Direct Capitalization Method)

Calculation ProcessItems

R-DepositJPY 856,230

×

Sheet-Ⅴ

3. Calculation of Expenses

JPY 20,710,897.-

JPY 0

C-Common AreaJPY 15,000

㎡Available Area

Memo

Building Area

Site Area

Reproduction Cost

Total

Condominium unit

㎡77.91

Structure

JPY 180,000① M/Management

JPY 180,000

JPY 428,115

JPY 15,000

12months

Calculation Process

④ P.M.fee③ Cost of repair

12months

Sum 77.91㎡ JPY 428,115

① Contract

77.91㎡

×

P.2

6

Common area

④ Parking lot fees

×

JPY 0

JPY 5,137,380

Items

/Market rents

Conditions

77.91㎡

② Charges for

③ W/S/E

Operating expenses（ ① ～ ⑥ ）

JPY 0JPY 0

/Other utilities

⑤ Other income

-JPY 221,558

JPY 0

JPY 0JPY 0

JPY 40,000

⑥ Vacancy

%

JPY 94,800,000.- (D) ÷ 4.7 %

%3.5 8.5

1.5

%

%

3.5

Cost of Equity

4. WACC

Indicated Value:

%

Weight of Equity %30

Net Operating Income

JPY 5,095,822

%8.5

Operating income（ ① ～ ⑥ ）

Cost of Debt （long term）

JPY 4,454,806

JPY 4,544,711

JPY 102,748(B) JPY 12,843Interest on R-deposit 1.5%

%

% 70

Weighted Average4.7

Weight of Debt3.0

Cost of Capital

(D)

77.91㎡

1. Conditions of Lease

2. Calculation of Income

Floor Total Area

100.0%

％100.0%34F

Unit RentJPY 5,495/㎡

Rentable Area Rent / MonthJPY 428,115

× 12

××

24

JPY 15,000

JPY 856,230

② W/Other utilities

× 12

× 12

JPY 0 × 12

JPY 0 × 12

SAMPLE

（JPY）

Category Year 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year 10th year

Income

Contract/Market rents 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380 5,137,380

Charges for Common area 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000

W/S/E/ Other utilities 0 0 0 0 0 0 0 0 0 0 0

Parking lot fees 0 0 0 0 0 0 0 0 0 0 0

Other income 0 0 0 0 0 0 0 0 0 0 0

Vacancy/Collection loss -221,558 -221,558 -221,558 -221,558 -221,558 -221,558 -221,558 -221,558 -221,558 -221,558 -221,558

Total operating income 0 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822 5,095,822

Expense

Maintenance/Management 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000

W/S/E/ Other utilities 0 0 0 0 0 0 0 0 0 0 0

Cost of repair 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000

Property management fee 0 0 0 0 0 0 0 0 0 0 0

Leasing commissions 0 0 0 0 0 0 0 0 0 0 0

Property tax for Land 54,100 54,100 54,100 54,100 54,100 54,100 54,100 54,100 54,100 54,100 54,100

Property tax for Bldg 176,300 176,300 176,300 176,300 176,300 176,300 176,300 176,300 176,300 176,300 176,300

Property tax for D.A. 0 0 0 0 0 0 0 0 0 0 0

Insurance 20,711 20,711 20,711 20,711 20,711 20,711 20,711 20,711 20,711 20,711 20,711

Other expenses 0 0 0 0 0 0 0 0 0 0 0

Total operating expenses 0 551,111 551,111 551,111 551,111 551,111 551,111 551,111 551,111 551,111 551,111 551,111

Net operating income 0 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711 4,544,711

Operating expense ratio 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8%

Interest on R-deposit 12,843 12,843 12,843 12,843 12,843 12,843 12,843 12,843 12,843 12,843 12,843

Levelled capital expenditure 102,748 102,748 102,748 102,748 102,748 102,748 102,748 102,748 102,748 102,748 102,748

Net operating cash flow 0 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806 4,454,806

Discount factor 1.0000000 0.9569378 0.9157300 0.8762966 0.8385613 0.8024510 0.7678957 0.7348285 0.7031851 0.6729044 0.6439277 0.6439277

PV of NOC 0 4,262,973 4,079,400 3,903,732 3,735,628 3,574,764 3,420,827 3,273,519 3,132,554 2,997,659 2,868,573

Total PV of NOC 89,096,128

PV of Reversion value Sale costs 3.00% 2,672,884

Indicated Present value 0

86,423,244

Discount rate 4.5% Standard rate + Area + Bldg. age + Grade + State

Terminal risk rate 0.5% 5.0% -0.3% -0.2% 0.0% 0.0% 4.5%

P.2

7

Reversion

Resale value

Sheet-

Ⅵ

Demolition / T-removal

(Discount rate is indicated by reflecting above premiums on the standard rate which derived from comparable sales data.)

= Discount rate

Sheet-ⅥIncome Capitalization (DCF Method)

JPY 90,900,000.-

JPY 35,249,628.-

JPY 55,650,319.-

(Total PV of Net Income + PV of Reversion)

SAMPLE1 Agreed Same condo 77.54sq.m 834.64sq.f. dwelling RC 8F 5 y.o. JPY343,225 JPY15,000 JPY358,225 JPY4,620/sq.m. JPY686,449 2.0 mo.

2 Agreed Same condo 72.62sq.m 781.68sq.f. dwelling RC 8F 5 y.o. JPY341,639 JPY15,000 JPY356,639 JPY4,911/sq.m. JPY683,278 2.0 mo.








10

No.Agreedor not

Rent/sq.m.Conditi

onTime

adjust.Standardizing

Market-specific

Rentable Area

3 Agreed 5,049/sq.m. 100% 100% 97% 100%

4 Agreed 5,248/sq.m. 100% 100% 95% 100% 77.91 sq.m.

7 Agreed 5,460/sq.m. 100% 100% 95% 100% *Note.

*Note.

*Note.

JPY428,115 JPY428,115.-

5,187/sq.m.

Rent Comparables

P.2

8

to stationon foot

Area Use FloorAgreedor not

Location Frame

(Dwellings)

Sheet-

Ⅶ

NearbyStation

No.on

map

Rentper month

Bldg.Story

Bldg.Age

Indicated Rent

Total Rent per monthper sq.m.

Adjusted Rent

Modified indicated rentIndicated rent

*Note.

4,986/sq.m. 5,024/sq.m. 109%

M. fee & R. cost deduction

100.0%

4,898/sq.m.

Average Property-specific Indicated Rent

Sheet-Ⅶ

Charge forCommon Area

Total Rentper month

Refundable DepositDeposit/Rent

JPY428,115.-JPY5,495/sq.m.

SAMPLEPhotographs .. App. 12

Copy of Road Register Book .. App. 09Document of Building Confirmation .. App. 10Copy of Public Registry Book .. App. 11

Registered Land Surveyed Map .. App. 06Registered Building Drawings .. App. 07Building Drawings (Subject floor) .. App. 08

Topography Map .. App. 03Residential Map .. App. 04Public Sectional Map .. App. 05

Since this report is a sample, following pages are intentionally excluded.

City Map (Land Comparables) .. App. 01Aerial Photographs .. App. 02

Documents

VALUATION REPORTVALUATION REPORT · My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with IVS (International Valuation Standards)